Collectives: Delivering transparency and decision-making

Bud Caddell, Founder & CEO, NOBL

Bud Caddell is the Founder of NOBL and has been focused on
the future of work for more than a decade and has been advising corporations on
strategy even longer. Bud grew up obsessed with technology and its potential,
even serving as the Head of Technology at a venture-funded startup before he
entered college. His work has been featured in The New York Times, The Wall
Street Journal, Forbes, and AdAge.

Collectives: Delivering transparency and decision-making

Bud Caddell founded NOBL, a worker collective consulting firm in 2014. Worker collectives make decisions by practicing direct democracy versus electing a board of directors. In NOBL’s case, decisions are made by a broad consensus structure of all employees and operates with little hierarchy. NOBL’s four locations have local authority, and everyone has a stake in the company. Twice each year NOBL reboots by asking employees how things could be done differently, effectively creating a new company.

Transcript

Collectives: Delivering transparency and decision-making

Bud Caddell, Founder & CEO

Jon Mertz: 00:02
Welcome to the Activate World podcast, a series on how business leaders
have more power to solve societal issues than any elected official. We explore
business activism with substance and depth of thought.

Jon Mertz: 00:20 As we continue to explore different organizational business models today Bud Caddell founding member of NOBL is joining us. Bud welcome to Activate World.

Bud Caddell: 00:29 Thanks for
having me Jon.

Jon Mertz: 00:30
Tell us a little bit about your background and what led you to start
NOBL.

Bud Caddell: 00:34 Ooh. So a long
time ago I was a software engineer, a pretty terrible one. Then found myself
right around 2005 consulting for some of the largest organizations on the
planet about what was happening with the internet. And at that time, even then
the internet was almost considered like the moon in terms of how foreign and
strange the landscape was for some organizations. That sort of led me to become
the corporate innovation guy around strategies, and new services, and new
products. And then sometime around 2008/2009 I looked at my success rate and it
was dismal. I had to ask myself whether it was the quality of ideas that I was
bringing to organizations, or something about the organizations themselves, the
environment in which new ideas were trying to take root. It was like dropping a
seed on a linoleum floor.

Bud Caddell: 01:29 It was no longer
about the products, and technologies that I was bringing to organizations, to
me it became much more clear the problem was how organizations work, everything
from leadership, to incentives, to structures, to systems in said companies.
Pursued that path for quite a while, and then in 2014 started my own firm
called NOBL to do that full time, and to build a team around that challenge.

Bud Caddell: 01:56 We’re still really small so … Our
goal is to stay pretty small. So we are in L.A., New York, London, and
Vancouver, and each location has a team of 4-5 people. We also keep a network
of around 2000 folks who are either industry experts or regional experts who
can augment our team. So when we work here in L.A. for an animation studio we
can bring on someone from Pixar who did films there, and they can train us in
animation so that we can be smart consultants for our clients.

Jon Mertz: 02:25
How would you describe the purpose of NOBL?

Bud Caddell: 02:28 That’s a really
good question. I think over time it’s really been about reintroducing human
agency into work. We’re usually with a client for quite a long period of time,
and I know we’re ready to leave that client when I can see that the people who
work inside the organization have human agency again, and efficacy at work. Meaning,
very small things in terms of either they see a problem and the can fix a
problem, and they feel empowered to do so, and they understand that they are
the culture.

Bud Caddell: 03:00 That flip, that
mental flip is really what excites me, and excites everyone who works at NOBL,
to give that back to people at work so work isn’t a thing being done to you,
work is a place where you participate. That’s not the best brevity in terms of
purpose, but that really is the feeling and the ability that we hope to
instill.

Jon Mertz: 03:21 It seems like making a mental flip could
take a long time. What’s the typical cycle that would spend with a client?

Bud Caddell: 03:27 There’s a lot of
different ways to engage with us, but when it comes to trying to make
meaningful, lasting change we can be onsite from three months, to six months,
to nine months, to a couple clients for a year. Just depends on the size of the
organization and the scope of change that we’re making.

Jon Mertz: 03:44
So what’s unique about how NOBL is
organized?

Bud Caddell: 03:47 I’ve worked at many consulting companies in the past, and what I’ve wanted to try to do as I developed NOBL, and our principles, our values, and the way that we structured the company, is to be as close to a workers collective as we can be as a consulting company. Which is actually pretty tricky in terms of how we’ve designed the company. It’s easy to start a farmer’s market that’s workers collective, it’s a lot harder when you have intellectual property, and clients, and things like that that you have to design for.

Bud Caddell: 04:15 But the idea is
that it’s a few different things. So one, we’re in these different cities and
each location really has autonomy and power over itself in terms of the
decisions it makes, what to do with its profit, a lot about what kind of
services they deliver. Everyone at the company in some form has a stake in the
company, if we were to sell some day everyone would benefit from that. We have
broad consensus structures so that everyone has a say about big decisions in
the company. And twice a year we shut down the company for what amounts to a
week where we all get together and we basically reboot the company.

Bud Caddell: 04:54 We ask a very
simple but hard question which is, if we were to start the company today how
would we do it differently, and everyone has a say in that. We break into
working groups, we come out and we are a new company. We do that every six
months, and I think we’re on like generation eight now of the company, we’ve
done this eight times. And so it’s a big part of empowering people and also
giving people access to the fruits of this thing that we’re trying to build
together.

Jon Mertz: 05:19
How do you balance the different locations and their autonomy with the
greater mission of NOBL?

Bud Caddell: 05:23 That’s a really good question. So far …
because I think we’re still, if I’m honest, finding product market fit with our
clients, and understanding what exactly they need. And every location is
bringing a lot of intelligence to the table in terms of, London’s a very
different market than New York. So there could be conflict there, you would
assume there might be, but I still think that we’re early enough that so far
having a very clear purpose in terms of reintroducing human agency has allowed us
to stay in congruence with each other, and that hasn’t been a challenge for us
yet.

Bud Caddell: 05:58 Now as we grow and mature does that
change? Probably. And in terms of some decisions around like who we hire, and
the makeup of those, those are wholly locally owned. Every location again is
very different, the talent market is very different for us. So in terms of what
we’re trying to pursue together, it works so far very well.

Jon Mertz: 06:18
So these meetings you hold to discuss how to change. Have the outcomes
been more evolutionary than revolutionary?

Bud Caddell: 06:24 We call it our
metamorphosis. We’re focusing on two different things at once. One is just
what’s the company that we’re taking to the market, and what do we offer. And
the other is, what’s the culture that we’re building. And obviously they’re
intrinsically linked. The kind of culture that we’re building has been very
clear evolution, because I think early on we were very conscious in the culture
that we wanted to build, and the habits and rituals around it. The things that
have been bigger punctuated shifts are just, how do we describe ourselves? What
kind of clients are we going after? We have to ask really hard questions in terms
of the packaging of what we do.

Jon Mertz: 06:59
You mentioned you’re a workers collective, so all team members own some
part of the business. Is that correct?

Bud Caddell: 07:05 Yeah, in some
form, or shape or the other. Every location lead has a specific relationship to
ownership in the business. But then overall we just have written agreements in
terms of what happens in the sale of the company. And I’ll be honest, that has
evolved over time in terms of how we work that out. And as you grow a business,
you start to find all of these edge cases in terms of ownership and equity, and
decision making rights, and things like that. So we’ve made some fine changes,
and we probably will have to continue to evolve. The principles that we really
stick to though are, if there’s an event of a sale of any kind everyone should
benefit from that. We want to give a lot of local authority and power over the
company for each of these locations to learn, and grow, and develop in their own
market.

Bud Caddell: 07:51 So while we’ve experimented with different ways to make that work, those values and principles have always been set in stone.

Jon Mertz: 07:58
And I think you wrote about state units versus pad stone units. So does
that play in to how ownership is structured?

Bud Caddell: 08:05
My goal over time is to reduce my
ownership of the company, and really build a body of partners across the globe
who have as much of a stake in the company as I do. And then people who work
inside those different locations also have a stake in their location, have a
stake in the overall business. And most importantly, have a say in their
location, and have a way to voice their concerns to the larger organization.

Jon Mertz: 08:33
Since everyone has a stake, or is an owner in some way, how do you
evaluate each person’s performance?

Bud Caddell: 08:39 We have very
clear goals and objectives for each location. We have a sense of what it takes
to start a location and how long that takes, and what the revenue curve should
look like. Even though we that every location’s offering us a bit of novelty
and complexity as we go about that. I can only say that we build in a lot of
feedback mechanisms into our culture. And everything from all of our board
meetings, which we have every other week, to the one on ones that we have with
each other as business partners are all based around performance and feedback.
How are things going? How can we help each other? What’s the feedback that we
can offer each other?

Bud Caddell: 09:20 I’ve found that
as organizations scale your attention can be taken away from the culture, and
taken away from independent relationships. For us the way that we’ve tried to
design around that is to make these rituals set in stone, and to be very
conscious about our processes with these check-ins so that you can’t get too
busy, that you can’t get too distracted. That these are always constant
conversations that are happening, so there’s not some big crisis moment where
we all have to get together and we haven’t shared how we’re doing or how we’re
perceiving each other’s performance.

Jon Mertz: 09:54
So it sounds like your process happens throughout the year. Is that a
correct assessment?

Bud Caddell: 09:58 Yeah definitely.
I think that we … I mean you’re starting to see even the big consulting
companies really question that annual performance review structure. But for us
it’s how do we have that every two weeks, some kind of conversation around
that, and some personal goals and development that we want to pursue and ways
that we can hold each other accountable. And we have lots of different
mechanisms for that. We have everything from … You know obviously I have one
on ones with my business partners every other week, but we also have a
stewardship program where it’s a random assortment of folks who develop
personal goals for themselves, and then have a buddy that they check in with.
And we rotate that every few months as well. So for me the question was how do
you turn that into an ongoing constant conversation rather than a stilted
punctuated one once a year.

Jon Mertz:
10:46
What role does transparency play within the organization?

Bud Caddell: 10:49 We started the company as transparent by
default. So everyone sees the financials. We review the entire company’s
financials every week together as a company. Our salaries are completely
transparent. We have a band system that everyone can see what is expected at
every band, and also where people sit on those bands. I would recommend that if
you’re starting a company from scratch, but when we get asked about this for
our clients it’s one of those things where there are lots of ways to introduce
elements of transparency without going fully transparent. Because I think there
are unintended consequences for that.

Jon Mertz: 11:27 How does that transparency apply to equity
and pay?

Bud Caddell: 11:30 We have a band
system, and then we’ve paired it with what we call super powers. You have bands
that have very clear definitions of what is expected for you. And then we have
sort of super powers around that we can credit to people. You might be really
great at closing a deal. You might be phenomenal at developing new IP for
example. At the location leads can give those to people on the team to bump up
their salary and things like that. And it’s really clear who qualifies for
those, because those really have to be true super powers. That’s where we are
on that band system right now.

Jon Mertz: 12:11 Walk us through how the decision making process works within NOBL. How do you reach decisions on how to move the business forward?

Bud Caddell:12:18 We use a wide array of decision making models. We actually built a website and a Slackbot, just for this, it’s called the Decider. It’s a tool that helps us pick the right decision making framework for the challenge that we’re facing. It’s really fun, and helpful, and it sits in our slack channels and it can predict when we’re trying to make a decision and then it interjects and asks us a few questions, and actually tells us the right decision making model to try in that context. It uses a range of consensus, consent, authoritarian, like a single decider, delegation. You know there’s even when should you flip a coin, or when should you delay until the last possible moment. We did a ton of research to build that out, and vetting it, and testing it, and it’s been a really fun tool for us to use internally.

Jon Mertz: 13:05
And has it been effective?

Bud Caddell: 13:07 It has really. It really has because the
insight came from that teams struggle with decision making because they jump to
immediately trying to figure out the decision without thinking through who
should be involved and what the process should be. So we like to say that
there’s a step before deciding, which is to decide how you’ll decide. That has
given us … It creates a framework and it creates a playing field where people
feel like there’s some fairness, and go, okay I know why we’re approaching it
in this way. Maybe this decision we’re actually democratic voting, maybe this
next decision because of speed and the level of risk we can actually us
something like consent where it’s just about no one objecting to the decision.

Jon Mertz: 13:47
Yeah that’s a good point. A lot of businesses seem to miss that. The
decision process can get messy and bogged down.

Bud Caddell: 13:53 What we’ve
noticed is we tend to have two kinds of clients. Like very, very large public
companies, or very, very fast-growing startups. And then the very, very fast-growing
startups that we work with oftentimes they’ve started the company using
consensus and everything is a … because it’s easy when you’re small. But then
as you grow that just becomes really, really hard. And so they start to default
then to a single decider, which has its limits as well. And so there’s this
spectrum of decision making models they’re missing out on.

Jon Mertz: 14:25 How does the operating structure at NOBL compare to a model like holacracy?

Bud Caddell: 14:31 A former
consulting company I worked with went holacratic. When I first started NOBL I
think it was one of the first big trends of companies trying holacracy. We were
called a lot to come in and fix holacracy implementations because people really
struggled with it. Some people have succeeded with it, and a lot of folks have
struggled. We’ve certainly stolen things from it, and borrowed it in terms of
our own practice. It’s a model that’s also built on top of sociacracy, and some
other tools like that. There are things around decision making, the way that
you create roles. There’s some things that really work well in it.

Bud Caddell: 15:11 For us, I really
struggled under that system because it didn’t feel human to me. A lot of people
could disagree with that, but i didn’t get a sense of it really recognized the
individual. It’s very fast paced in terms of decision making, and we have a
pretty diverse team in terms of how they approach problems, and the time they
need to think through things. I just thought some of the parts of it really
started to suppress parts of humanity, I guess I’m going to say it that way.

Jon Mertz: 15:45
So how much of the holacracy
model did you adopt of modify?

Bud Caddell: 15:48
I just really liked some of the
principles around just roles, or the hats you wear. And you can hold multiple
roles at the same time. We took that, we use a Trello, board to mark who has
what roles, and we can move those around. Aside from that, I like that idea a
lot, and we borrowed that in practice. When I sit with one on ones with folks
and we review roles really quickly, and I just get a sense of like what roles
they’re really excited to hold, and what’s challenging for them and things like
that. So I like that concept of it.

Jon Mertz: 16:22
What do you see as some of the challenges ahead in keeping your model
intact, or in figuring out how to modify it to account for growth?

Bud Caddell: 16:30 I think there’s
always a challenge. The things that … You know an out of the box solution
like holacracy does, is that it tries to answer every possibility out of the
gate. And I think for us we’ve had elements of our culture that we’ve tried to
be very conscious about, but then we allow elements of the culture to be a
little bit like ad adhocracy in terms of like we’ll figure that out together
because we have the decision making frameworks to do that. We don’t have to
document everything yet, or we don’t have to have all the answers figured out.

Bud Caddell: 17:03 I think any
company as it scales, the challenges that we’re going to have to face are how
do we stay customer centered. As a consulting company I mean if we’re not
customer centered then we should be out of business. But then when we think of
the board of NOBL, so that’s every location lead plus someone from that
location, we think of the customer for the board to be the rest of the company,
every individual employee who works in the company. And as we grow and scale
there’s always a tension of does the board start to serve itself and its own
interests or not. That’s a conversation we literally had in the last board
meeting, which was are we serving our own needs in this conversation or are we
really thinking about the people who work at the company.

Bud Caddell: 17:44 And so that will be a challenge for us as
we grow. And then the thing that is a challenge for just NOBL specifically is
that we are a very distributed company in terms of we’re small but we have
multiple locations. Even in our locations we have a funny condition in which
that we don’t keep office space. Our clients actually provide us space. And so
if we’re working on multiple clients, our teams in those locations could be
spread across a couple locations.

Bud Caddell: 18:09 So we are very remote
first as a company, and I think that challenges our culture as we scale. That’s
one of our biggest conversations internally right now. We’re trying to learn
from some of the best in class companies like GET Lab, what they’ve published
about themselves. That I think is going to be the next challenge for us in the
next 18 months, is how do you maintain a culture in a remote first way. I don’t
think anyone’s totally figured that out yet.

Jon Mertz: 18:40
How do you keep the human connection with your employees as the company
grows?

Bud Caddell: 18:45 The thing I’ve learned about that is, I think when we all started to know that we can create remote companies because of technology, a lot of us, and I count myself included, tried to think about how do you recreate the cultures and conditions of a co-located company. And I actually think that that was wrong. So now what we think about is, like remote cultures are just going to have to be very different, and they require different expectations from people who work in those companies. But also like a different level of self-care, and self-awareness for people who work in those companies.

Bud Caddell: 19:22 A lot of the
challenges we face are people can feel lonely. And there’s only so much that
you can do in a remote culture to really support that, and you should try
everything you can. But it’s also dependent on the individual employee to try
to build community around them where they live.

Jon Mertz: 19:40 Oh that’s great. So lastly, what
leadership traits are vital in a collective?

Bud Caddell: 19:44 Definitely the
biggest super power you can possibly have is self-awareness. And that is a
muscle that you have to develop over time, and it’s also a muscle that
fatigues. You have to be aware of how you show up, and your effect on other
people. And that’s a constant conversation that we have. You certainly, in a
remote culture, have to have a high level of accountability. You have to really
have personal accountability because no one is looking over your shoulder.
You’re your own big brother to some degree, and that’s incredibly important.
And then for us, self-care and resilience is absolutely essential for the kind
of work that we do. We don’t really look for culture fit, but we definitely
have to make sure that people who come to the company have those abilities.

Jon Mertz: 20:32
Well Bud thank you so much for your time. It’s been an enlightening
conversation as I expected it to be. So I really appreciate your time.

Bud Caddell: 20:39 Thank you so
much Jon. I’m really happy to discuss all of this.

About

Activate World is a think tank for business leader activism. We bring substance, depth of thought, and a non-ideological perspective to teach business activism to leaders. We provide well-researched analysis of today’s issues and insights for effectively integrating activism into your organization’s culture according to your mission and values.